Determine your needs
There are few things in life that are as exciting or as nerve-wracking as the search for a new home, but knowing what you want before you begin and understanding the 'ins and outs' of the process, will help you stay stress free.
Start with a budget and stick to it
As soon as you've made the decision to buy a new home, one of the first things to do is review your financial situation:
Look at your current household budget to see what monthly mortgage payment you can afford.
Clear any debts that you can, making sure you leave yourself enough for a deposit.
Avoid creating new debts as this could affect how much you can borrow.
You can run a free online credit report if you think there might be problems with your credit history.
Prepare the papers you'll need to produce when you apply for a mortgage including payslips, bank statements, utility bills, tax returns and details of any existing loans or mortgages.
Once you have your financial house in order it will be easier for you to talk with mortgage lenders about how much you can borrow.
Tackle your mortgage
Shop around to find the best mortgage deal and once you have found a good rate, get an offer in principle from your chosen lender. Remember though, you're not tied in at this stage, so you could still go elsewhere if you find something better.
You can then work out which is the best type of mortgage for you - repayment or interest-only:
With a repayment mortgage, your monthly payment covers part of the amount borrowed and part of the interest owed. This type of mortgage is less risky because at the end of the term, usually 25 years, the mortgage is clear.
With an interest-only mortgage, your monthly payment only covers the interest on your mortgage, so you will need to make additional payments into an investment fund, such as an ISA.
If you're not sure what would suit you best, a financial advisor can help you decide.
Prioritise what you need and want
For most people, finding the right property is a matter of compromise. You might find your perfect home but in the wrong location, so it’s important to know the things you are willing to give up.
Make a checklist of what you want before you start looking. Think about:
Where you want to live? – Town or country? Near a good pub or within a short walk of the station?
What kind of house? - New-build or an older property? Detached, semi-detached or terraced? Spacious or cosy? Garden or garage?
How many bedrooms? - A spare bedroom for guests, or a study? And could that shoe-box sized bedroom be turned into an ensuite bathroom?